Your appeal of material supervisory
determinations has been decided. Rulings not in your favor were made by the
Supervision Appeals Review Committee (Committee) of the Federal Deposit
Insurance Corporation (FDIC) on February 21, 1996 and are conveyed in this
letter. The other appeal issues and comments on other matters related to
the examination process were resolved by Nicholas J. Ketcha Jr., Director,
Division of Supervision. Mr. Ketcha's findings are conveyed in a separate
letter.

The
Committees finding on each item decided against [Bank] (Bank) is
presented below along with an explanation of the reason for the decision.

1. Substandard Classification
of the PropertiesThe Substandard classification on the Properties with
book value as Other Real Estate at $8,413,000 is deemed appropriate.
Factors leading to this determination included the following. The Banks
stated 7.9 percent return on book value is not sufficient for these high
risk asset properties. Among the high risk items is that income to the Bank
is volatile as it is based on the merchandizing activities of the lessee,
not fixed payments. If the lessee chooses not to renew its lease, it is
uncertain whether or not a new lessee could be found, or, if found, whether
the same amount of income could be generated. Value of the real estate is
questionable as deficiencies are noted in the appraisal and the property has
very limited marketability. Even if the $8.7 million appraised value is a
fair representation of current market value, the margin of protection is
insufficient for these properties' high degree of risk and the relatively low
rate of return. The Bank has been unable to dispose of the properties for
over eight years and there is still apparently no buyer interest. The
property is leased on a year-to-year basis and the lessee is not interested in
entering into a long term lease arrangement or in purchasing the
properties. Substantial loss exposure is present.

2. Termination of the
Cease-and-Desist OrderIt is determined that the subject Cease-andDesist Order remains an appropriate corrective program for your Bank; it
will therefore not be terminated at this time. While the Banks condition
has improved since the 1991 examination on which the cease and desist order
was based, the volume of adversely classified assets remains excessive, loan
administration problems including hazardous lending practices still exist,
management deficiencies including the boards structure continue, compliance
with the order is incomplete, and confidence is low that Bank management is
willing to take necessary corrective action based on an informal corrective
program. The FDICs approach to determining the appropriate corrective
program is driven by a banks condition as identified at examinations,
compliance with and continued relevance of any existing corrective program,
and by our judgment about the willingness of the institution to take
necessary corrective action to eliminate the problems.